Transcript—ABC Statewide Drive

Interview

DCI026/2016

20 December 2016

Subjects: Infrastructure spending in Victoria

Nicole Chvastek: Darren Chester is the Minister for Infrastructure and Transport and he is also the Nationals MP for Gippsland. Darren Chester good afternoon.

Darren Chester: Good evening, Nicole.

Nicole Chvastek: Why does Victoria get 77 cents out of every $10 of infrastructure?

Darren Chester: Well I saw that article in a Melbourne newspaper today, and it's not entirely a reflection on what is occurring. Across the 2013–14 to 2019–20 period, which is the period of the most recent agreement between the states and the Commonwealth, there's $6.7 billion going to Victorian projects. So that figure is not a full reflection on what's going on across the board. If you look at the numbers for Victoria and include the East West Link project, which has obviously been a project of some political consternation, we've got $3 billion sitting on the table for a Victorian government prepared to build that road, and that takes the total percentage for Victoria in the order of about 20 per cent of the infrastructure spend. But I recognise that the East West Link project is not one that's going to proceed under the current government, but that funding is available for any future government, and we need to focus on working on the projects we can actually agree on. That's what I've been doing over the course of these past 12 months with the Victorian Government.

Nicole Chvastek: But there is no point in citing projects which aren't going to be built.

Darren Chester: Well there is a point in the sense that this is part of the historical problem that I've been dealing with in the past 12 months, is that there was money on the table for Victoria to do the East West Link and they decided not to do it. So at the start of this year we had $1.5 billion sitting in a bank in Victoria with no plans for it to be used for anything, and we've been able to negotiate with Victoria over these past 12 months for them to match that funding, and we've announced about 40 projects which Victoria has agreed on to get $3 billion worth of work underway.

So in the sense that we started behind the eight ball, I guess, at the start of this year, to get that agreement through this year and get those projects going, which is projects like the Monash Freeway upgrades, the M80, the Murray Basin Rail, and $345 million each—so it's from the state and Federal Government, $345 million each for rural and regional roads, which will deliver much needed road safety improvements. It's not as bad as it might sound, and I understand people stuck in traffic right now on the Monash or in other parts of Melbourne just want us to get on with the job, and I can assure you that I'm working very constructively with the Victorian Government to make that happen.

Nicole Chvastek: Because a lot of that $6 billion that you cite is unallocated. Why not simply reallocate that $3 billion for the East West Link and allow the State government to spend it somewhere else?

Darren Chester: Well the East West Link is a project we believe in as a Coalition. We believe that it should be built…

Nicole Chvastek: Yeah but in Victoria—Victorians decided that it was a project they didn't believe in and Daniel Andrews went to the election saying that if he was elected it wouldn't be built and Victorians elected him. So that's what Victorians decided to do so why not accept that is part of the democratic process and allow the money to be spent somewhere else?

Darren Chester: Absolutely, Nicole. As a consequence, I think I described at the start of the year there was $1.5 billion sitting there which wasn't being used because we couldn't agree. I decided to work with the state to find something we could agree on, and that was the projects that the Prime Minister announced a matter of about a month ago. So that work will start, and that's $3 billion being released for projects across Victoria. There's an additional $3 billion there in the Federal Government contingency for any Victorian government that wants to build the East West Link, because we believe it's an important infrastructure project that needs to be built at some stage in the future.

Nicole Chvastek: But we don't want a contingency, we want it now.

Darren Chester: Well that's what I'm saying to you. We believe in that project, and there's other projects we're working with the Victorian Government on that we can agree on. So I've had discussions only a matter of a few weeks ago with Tim Pallas, the Treasurer, about other projects that they're keen to pursue. Infrastructure Victoria has put forward a range of what I think are very good projects, like the Tullamarine Rail Link which has been talked about for a long time, and there hasn't been any progress of any great note; regional passenger rail upgrades, which I know is something that you're passionate about and have talked about before; work on the North East Transport Study around those north east corridors of Melbourne which are in desperate need of a linking ring road. So there are plenty of projects we can work with Victoria on, and that's what we're trying to achieve.

Nicole Chvastek: Nonetheless this report is that we will only in fact get 7.7 per cent of a $26 billion spend, that Victoria has 25 per cent of the population and we get 7.7 per cent of the $26 billion infrastructure spend, regardless of how you spin it the optics don't look good.

Darren Chester: Well I can assure you, Nicole, over the four-year period we're referring to, Victoria will do better than that. I'm working with Victoria on projects through the Asset Recycling Initiative—again an area that has been subject to a fair bit of public debate.

Nicole Chvastek: Well hang on the claim is that we were ripped off with the recycling asset initiative because the $9.7 billion Melbourne lease deal was supposed to deliver Victoria, I think it was, over $1 billion and the feds have offered us about $800 million.

Darren Chester: $877 million, and the claim about being ripped off is one that the Victorian Government is trying to make, which is not substantiated by the facts. I mean, the fact the situation in Victoria failed to meet the deadline in terms of putting their submission in for the Port of Melbourne sale, and the agreed figure was $877 million through the Asset Recycling Initiative.

Nicole Chvastek: Isn't that nit picking, Darren Chester? They failed to meet the deadline so we are going to refuse to give them $500 million to which they were entitled?

Darren Chester: Well it's not a question of what you're entitled to or not, Nicole. You say are we nit-picking; this was the deadline for the program. Other states met the deadline and received the funding that they were eligible to receive. Victoria has $877 million under that program, and I'm working with Victoria to secure money for other projects and additional funding for projects that we can agree on. Now, personally, I don't think people sitting in traffic tonight care less about the state and federal argument. They want to know how we're going to work together and deliver more money for Victoria, and as a Victorian and someone who comes from regional Victoria I'm very keen to see that happen. I have been working very constructively with my counterpart in Victoria, Jacinta Allan and Luke Donnellan, and also the Treasurer Tim Pallas to see that happen. Now, it won't happen overnight, by the nature of the fact that infrastructure projects do have a long lag time, but I'm very confident we'll be able to get a fairer share of funding for Victoria into the future, and it's something that I'm very passionate about achieving.

Nicole Chvastek: Is this bottle neck somehow related to the bad blood and animosity which seems to be growing between the two levels of government—between the Andrews government and the Turnbull government and the people picking up the tab for this being Victorian taxpayers?

Darren Chester: I think there was a fair degree of political animosity around the East West Link project. It was the subject of a great deal of political debate between state and federal governments. For me, I came into the project long after the decision was made by the Andrews Government to tear up the contract, so from my perspective I'm not particularly interested in re-prosecuting the old arguments. I'm more, I guess, more practical and pragmatic in the sense that I just want to get stuff done. I want to see what we can work on with the Victorians to actually get built.

The East West Link is still something that we would like to see get built in the future, but I recognise it's not going to happen under this Government. At the same time, there's other projects that can be done and should be done. People would recognise that Victoria's one of the fastest growing states and Melbourne is the fastest growing region in that state. We have some challenges which Melbourne's growth is presenting to us in terms of infrastructure spending. I think part of the solution is actually delivering infrastructure in some of your major regional centres, the Ballarat, Bendigo, Geelong, Shepparton, Mildura, Traralgon, Warragul; these centres have capacity to grow as well and take some of the pressure off Melbourne's growth. So, it has got to be a two-stream approach, if you like. You do the infrastructure that's required in Melbourne but also look at growing the rest of Victoria at the same time.

Nicole Chvastek: And of course these statements sound great but the national accounts which came out recently indicate that while Melbourne is growing at a great rate of knots, regional Victoria is effectively in recession and has been for four years.

Darren Chester: That's not my understanding of the figures, Nicole. My understanding is there's parts of regional Victoria which have struggled when other parts have been going quite well. So, it has been patchy, I would agree there, but I wouldn't describe it as being in recession. There's many parts of regional Victoria which have lower unemployment rates than other parts of the urban areas. But there's no doubt …

Nicole Chvastek: Well the National Accounts showed that regional Victoria was registering negative growth and had been for the last four years.

Darren Chester: But what I I'm saying is, Nicole, it's very patchy. In parts of regional Victoria I go to there's some very strong areas where, for example, in Sale tonight—talking to you from Sale—and Sale has been going very strongly over the last few years. There's other parts of regional Victoria, no question at all, have struggled and they're going backwards and we need to support them as well. So, it is a difficult economic problem to deal with when you have patchy growth and patchy results around the state but there's many parts of regional Victoria which are going quite well, in fact performing very strongly and have capacity to grow into the future.

And I think that's one of our challenges. We're operating in an environment at a federal level, and you touched on it, where it's a budget-constrained environment. We need to get on top of deficits and debt and keep our national economy strong and build that confidence and certainty in the community. But at the same time, there are expectations that we're going to be able to build the infrastructure the community wants. So, it isn't an easy job and I have to say that since being in Cabinet in the last ten months, I've sort of recognised that most of the easy decisions have already been made. Most of the decisions that come to Cabinet are pretty tough decisions and you've got to work your way through how you fund these important infrastructure improvements but at the same time make the savings which are reasonable and fair for the community.

Nicole Chvastek: Minister you must be winding down for Christmas?

Darren Chester: I'm actually—I've got a few more days in the electorate here in Gippsland and then a couple of weeks at home, which will be very nice.

Nicole Chvastek: Great to talk to you, thank you again.

Darren Chester: I appreciate your time, Nicole.